Yazdani-Beioky v. Sharifan

• Decision Date: 03 May 2018
• Docket Number: NO. 14-15-00702-CV,14-15-00702-CV
• Citation: 550 S.W.3d 808
• Parties: Shabahram YAZDANI-BEIOKY, Appellant/Cross-Appellee v. Abdee SHARIFAN, Appellee/Cross-Appellant
• Court: Texas Court of Appeals

550 S.W.3d 808

Shabahram YAZDANI-BEIOKY, Appellant/Cross-Appellee

v.Abdee SHARIFAN, Appellee/Cross-Appellant

NO. 14-15-00702-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinion filed May 3, 2018.

Richard P. Hogan, Jr., John L. Dagley, Houston, TX, Mike O'Brien, Washington, TX, for Appellant.

Shira R. Yoshor, Lloyd E. Kelley, Houston, TX, for Appellee.

Panel consists of Justices Christopher, Brown, and Wise.

Marc W. Brown, Justice

This appeal and cross-appeal arise from a partnership and an August 2008 oral agreement for appellee/cross-appellant Abdee Sharifan to sell his forty-percent limited-partnership interest in Metro Hospitality Partners, Ltd. (MHP), to appellant/cross-appellee Shabahram Yazdani-Beioky (Yazdani) for $12.5 million. Additionally, Yazdani sought a declaration that either Sharifan forfeited his interest or had a reduced interest because Sharifan missed an August 31, 2009 capital call.

The trial court conducted a bench trial in two parts, by agreement of the parties. The trial court found that Yazdani did not prove forfeiture or reduced interest. The trial court found that Sharifan fully tendered his partnership share in August 2008 pursuant to the oral agreement and that Yazdani breached by not paying Sharifan any of the agreed $12.5 million. The court also found that because Sharifan failed to properly account for using excess partnership funds related to purchasing trips to China, his affirmative relief was subject to an offset of $135,000. The trial court awarded Sharifan the sum of $12,365,000, as well as just under $1.5 million in attorney’s fees for trial, plus conditional appellate attorney’s fees.

Yazdani brings eight issues on appeal; Sharifan brings two cross-issues and two conditional issues. In addition, Sharifan filed a motion to dismiss Yazdani’s appeal. Yazdani filed objections to and moved to strike the declarations attached to Sharifan’s motion. We carried these motions with the case.

We deny the motions, overrule the issues and cross-issues, and affirm.

I. BACKGROUND

A. The partnership

In September 2005, Metro Hospitality Management, LLC (MHM), Yazdani (sometimes referred to as "Bob"), and Sharifan entered into a written partnership agreement to create MHP. Under the partnership agreement, MHM was the general partner, which owned a 0.1% interest; Yazdani was a limited partner with a 59.9% interest; and Sharifan was a limited partner with a 40.0% interest. Yazdani owned 100% interest in and was the sole member of MHM. MHP owned and operated the Crowne Plaza Hotel near NRG Park facilities and the Medical Center, as well as a nearby parking lot.

The limited partners had various disagreements relating to the extensive renovations required for the former Astroworld Hotel to obtain the "Crowne Plaza" brand. They also had disagreements relating to the treatment of cash generated by parking for events such as the Houston Rodeo. "HPD was called in" for at least one of Yazdani and Sharifan’s arguments. During the summer of 2008, the partnership relationship of Yazdani and Sharifan was "creating a terrible mess for" and "affecting operations at the hotel."

B. The buyout negotiations

Hotel general manager Sayed Hassan approached Yazdani to see whether he would be willing to buy out Sharifan’s share of the partnership. Yazdani indicated "that was probably the right thing to do" and asked Hassan to approach Sharifan to see if he was willing to sell and to find out at what price. Sharifan told Hassan he would sell his share for $15 million. Yazdani countered, though Hassan, with $12 million. Hassan stated that Sharifan initially was not interested, but Hassan proposed and Sharifan said "yes" to $12.5 million. Hassan went back to Yazdani, who "agreed on" the "final number" of $12.5 million "cash" for "all of Mr. Sharifan’s interest." "There were no other terms," only "the number." Sharifan went to meet with Yazdani in his office and "shook hands" with him on the deal. Yazdani told Sharifan he was "getting a good return" that was "fair." Yazdani told Sharifan, "Okay. 12-and-a-half, go see [attorney] Mike Little."¹

Sharifan went to see Little. Little knew that Yazdani was going to buy out Sharifan’s partnership interest for $12.5 million cash. When Sharifan mentioned the unsettled parking lot cash, Little told Sharifan that he should "take [his] money and go." Little told Sharifan to come back in a couple more days to sign the paperwork to transfer his interest. On August 13, 2008, however, Little sent Sharifan an email that stated: "Bob called me this morning and said that he would pay $7,500,000."

Sharifan obtained an attorney, Joe Slovacek. Slovacek entered into discussions with Yazdani’s attorneys at then-Fulbright & Jaworski regarding Yazdani’s "payment promise of $12,500,000" for Sharifan’s partnership interest. Slovacek stated that the August 2008 oral agreement involved "cash for transfer of the partnership interest" without any contingencies—"These folks wanted a divorce. [$12.5 million] seemed to be a fair number, according to my client." Yazdani’s Fulbright attorneys disputed that Yazdani had made any promise and recommended the parties engage in negotiations to resolve the dispute. In December 2008, Yazdani’s attorneys made a written offer of $5.75 million, which Sharifan, though Slovacek, rejected. In 2009, Yazdani approached his and Sharifan’s mutual acquaintance Hossein Farshchi and asked if Farshchi would broker a deal with Sharifan. The various offers and counteroffers were approximately $8 million, $6.8 million, and $6.5 million. According to Farshchi, Yazdani said Sharifan should have taken Yazdani’s earlier offer of $12 million.

At trial, Yazdani denied ever having made any offer to Sharifan to purchase his partnership interest at any price. Not only did Yazdani deny the interactions relating to the August 2008 deal, but also he testified he had no memory at all of negotiating with Sharifan later about buying out his interest, either through Little or Yazdani’s Fulbright attorneys or though Farshchi.

C. The capital calls

Pursuant to section 4.3(A) of the partnership agreement, "Additional Contributions," the general partner had the right to make a capital call of the partners for additional capital contributions. Yazdani first requested a capital contribution in August 2008 but revoked it in October 2008. Additional requests for capital were issued in June and August 2009, and Sharifan contributed his share of these capital calls. Sharifan did not contribute to an additional formal capital call issued on August 31, 2009. Yazdani contributed Sharifan’s proportionate share of this capital call. Yazdani elected to treat the additional contribution as additional capital of the partnership under section 4.4(A) of the partnership agreement, "Failure to Make Capital Contributions."

D. The bench trial

On November 3, 2009, MHM and Yazdani filed suit against Sharifan. MHP was later added as a plaintiff. Yazdani² sought a declaratory judgment that Sharifan has no interest in the partnership or in the alternative that the trial court determine Sharifan’s current interest under the partnership agreement.³ Sharifan answered and counterclaimed that Yazdani breached their August 2008 oral agreement. Also, on December 16, 2009, Sharifan filed suit against Yazdani in another cause number; the two cases were later consolidated.⁴ Yazdani pleaded that Sharifan’s claims were barred at least in part by offsets due to Sharifan’s misuse of partnership funds.

The trial court conducted a bench trial in two phases: first, Yazdani’s claims and then Sharifan’s claims. The trial court issued an amended final judgment in May 2015.⁵ The trial court ordered that Sharifan recover the sum of $12,365,000.00 from Yazdani. The trial court awarded Sharifan his reasonable and necessary attorney’s fees of $1,484,950.00 for trial, as well as conditional attorney’s fees for appeal. The court also awarded prejudgment interest at the rate of five percent per annum from December 16, 2009, until the date of judgment and postjudgment interest at the rate of five percent per annum. "In connection therewith, the Court hereby declare[d] that all of Sharifan’s former ownership interest in Metro Hospitality Partners, Ltd. belong[ed] to Shabahram Yazdani-Beioky." Yazdani and Sharifan requested and submitted proposed findings of fact and conclusions of law.

Yazdani filed motions for JNOV and new trial, which the trial court denied. After being directed by this court, the trial court issued findings of fact and conclusions of law on May 16, 2016. The topics covered by the 63 findings of fact included: the partnership; the August 2008 buy-sell agreement; request for declaration of forfeiture of partnership interest; Sharifan’s fraud claims; the "China Trip" accounting; the 2009 settlement agreement; Sharifan’s attorney’s fees; and Yazdani’s attorney’s fees. The trial court also issued 12 conclusions of law. Both sides requested additional findings and conclusions, which the trial court did not provide.

Yazdani brings eight issues on appeal; Sharifan brings two cross-issues and two conditional issues. Where appropriate, we consider related issues together.

II. POST-SUBMISSION MOTIONS

After oral argument and submission, Sharifan filed a motion to dismiss, arguing that Yazdani’s acceptance of the benefits of the trial court’s judgment by taking dominion over all the partnership interests rendered his appeal moot. Further, Sharifan contends he cannot be put back in his pre-final judgment status given Yazdani’s poor record-keeping and manipulation of the books since the final judgment was entered. Sharifan attached exhibits to his motion, including: a transcript of oral argument; declarations by Sharifan, CPA Bryne Liner who testified at trial, and Sharifan’s trial and appellate counsel Lloyd Kelley; email correspondence dated May 20-21, 2015, between trial counsel concerning Sharifan’s request for MHP’s "May financials"; and the trial court’s...